School of Business
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Item Investment diversification and financial performance of Deposit taking saccos in Kenya(KCA University, 2026) Mugwe, Pauline W.The study sought to investigate the relationship between investment diversification and the financial performance of deposit-taking SACCOs in Kenya. The specific objectives of the study were to examine the effect of investments in bond market, real estate, and FOSA products on financial performance of deposit-taking SACCOs in Kenya. The study was guided by Keynesian Theory of Investment, Prospect Theory, Modern Portfolio Theory, and Theory of investments. The target population was 178 SASRA licensed deposit taking SACCOs in Kenya and sample size was 36. Secondary was collected from the 36 SACCOs over a period of five years. The study employed a mixed-methods research design, integrating both quantitative and qualitative approaches. This data was analyzed using descriptive and regression analysis to investigate the relationship between investment strategies and financial performance. Different indicators, were deployed with Return on Assets (ROA), serving as the dependent variable. Diagnostic tests of multicollinearity, Hausman test, normality test, heteroskedasticity, test unit root test, confirmed the reliability and validity of the collected data. The descriptive statistics revealed the suitability of the sampled data. The inferential analysis demonstrated that investment in bonds, real estate and FOSA products have varying positive and significant relationships with financial performance of SACCOs with all the three variables having p-values less than 0.05. The coefficient of determination, R2 was 0.818 which indicates that the estimated regression equation can predict only 81.8% of the variation. The adjusted R2 was 0.815 which tells us there was 81.5% variation in the financial performance of SACCOs due to changes in investment in bonds, real estate and FOSA products. The research therefore recommends that SACCOs should strive to give top priority to integrating and utilizing investment portfolio, such as bonds, real estate and FOSA products in order to improve the financial performance and profitability of SACCOs in Kenya. The study suggests that research on other determinants of investments should be revisited to evaluate their effects on corporate performance and profitability in SACCOs.Item Financial management practices and financial performance of technical and vocational education and training institutions in Kenya(KCA University, 2025) Joseph, Patrick M.This study examined the relationship between financial management practices and the financial performance of technical and vocational education and training institutions in Kenya. The TVET sector plays a key role in equipping learners with the technical, vocational, and entrepreneurial skills necessary to support Kenya’s socio-economic transformation and the realization of Vision 2030. Despite increased government funding, many public TVET institutions continue to face significant financial and sustainability challenges due to weak fiscal oversight and resource mismanagement. This study aimed at examining the influence of financial planning, budgeting, internal controls, financial reporting and evaluated the moderating role of governance on the financial performance of these institutions. A descriptive, mixed-method research design was used to collect data from principals and finance officers across the 42 sampled public TVET institutions. Descriptive and regression analyses showed that financial reporting had the strongest positive effect on financial performance, followed by internal controls, financial planning, and budgeting. The results also indicated that effective governance significantly enhanced the relationship between these financial practices and overall institutional performance. The study concluded that effective financial management practices while reinforced by good governance practices are essential for accountability, transparency, and sustainability in TVET institutions. The study recommends continuous capacity building for principals and finance officers, participatory budgeting and automation of financial systems to strengthen institutional performance. These measures are critical to strengthening institutional performance and ensuring that public resources are utilized efficiently to meet the nation's human capital development goals.Item Corporate restructuring initiatives on the financial performance of state corporations in Kenya(KCA University, 2025) Marube, JamesThis empirical study investigated the effects of corporate restructuring initiatives on financial performance in Kenyan state corporations, systematically testing four key hypotheses through comprehensive statistical analysis. The research adopted an explanatory design to evaluate how organizational, financial, operational, and strategic restructuring dimensions influenced various financial performance metrics, including return on assets, return on equity, profitability ratios, and revenue growth indicators. The study employed a mixed-methods research approach, collecting quantitative data from 132 state corporations across six economic sectors. Data collection utilized structured questionnaires that were administered to senior executives within these organizations. The regression analysis yielded substantial results with an R-squared value of 0.923 and statistical significance at p < 0.001, indicating that the model explained 92.3 percent of the variance in financial performance outcomes. The hypothesis testing revealed distinct patterns across the four restructuring dimensions that were examined. The first hypothesis regarding organizational restructuring was rejected, with a standardized beta coefficient of -0.666 that achieved statistical significance at p < 0.05, revealing a significant adverse short-term effect on financial performance that appeared attributable to transitional disruptions, including workforce reductions and leadership instability during implementation periods. The second hypothesis concerning financial restructuring was also rejected, demonstrating a standardized beta coefficient of 0.610 with statistical significance at p < 0.01, confirming financial restructuring's substantial positive impact on organizational performance, particularly through effective debt restructuring initiatives and equity capital optimization strategies. The third hypothesis regarding operational restructuring was accepted, showing a beta coefficient of 0.132 that failed to achieve statistical significance at p > 0.05, indicating no significant standalone effect and suggesting that process improvements required complementary strategic reforms to generate measurable financial benefits. The fourth hypothesis addressing strategic restructuring was rejected, exhibiting the significant positive influence with a standardized beta coefficient of 0.908 that achieved high statistical significance at p < 0.001. The findings demonstrated that strategic initiatives, including mergers, acquisitions, and market repositioning activities, exerted the most substantial impact on financial performance outcomes. The theoretical analysis drew upon established frameworks, including Resource-Based Theory, Transaction Cost Theory, and Contingency Theory, to explain these empirical outcomes, emphasizing how Kenya's unique institutional environment shaped restructuring effectiveness and influenced the relative success of different restructuring approaches. These comprehensive findings provided robust evidence-based foundations for policy recommendations, advocating for prioritizing strategic and financial restructuring initiatives while implementing careful risk management approaches for organizational restructuring activities. The research advanced public sector reform literature by contextualizing restructuring dynamics within a developing economy framework, offering actionable insights that enhanced understanding of state corporation performance optimization in Kenya and similar institutional settings. The study's contributions extended beyond the immediate Kenyan context, providing valuable frameworks and methodological approaches that could inform restructuring efforts in comparable emerging market environments.Item Off-balance sheet activities, bank size and financial perfomance Of commercial banks listed on Nairobi securities exchange in Kenya(KCA University, 2025) Ndavi, JulianaKenyan commercial banks occupy a central position in the country’s financial ecosystem, facilitating market guarantees, capital mobilization, and economic development through regulated and inclusive financial intermediation. Off-balance sheet activities, have been associated with financial performance in different contexts. Therefore, this study seeks to address the existing gap in empirical literature by investigating the manner in which off-balance sheet activities relate to commercial banks listed on NSE in Kenya, The specific objectives were; to find out the effect of trade finance, guarantees, and letters of credit on performance of publicly listed banks in Kenya, and to establish the moderating effect of bank size on the effects between off-balance sheet activities and the commercial banks listed on NSE in Kenya. The theories anchoring the study included; Resource-Based View, Capital Asset Pricing Model as well as the Signalling Theory in addition to the Concentration–Fragility Theory. In the research, causal research design was employed based on panel approach, The research targeted the 11 publicly listed banks in Kenya from the year 2015 to 2024 To facilitate systematic data gathering, a structured data extraction sheet was designed to capture the relevant variables from the secondary sources. Descriptive statistics were utilized to summarize the data, which was presented on frequency tables. Using a Dynamic Panel-Data regression model, at 5% significance level, a model was obtained to predict financial performance of the banks in terms of Off-balance sheet activities. The data was tested for diagnostic tests, which included normality as well as multicollinearity together with heteroscedasticity in addition to autocorrelation, stationary and Hausman Test. The research ethically conducted through adhering to the highest standards of academic integrity and ethical research practice. The study concludes that; trade finance plays a significant positive role the financial performance of commercial banks listed on the NSE, guarantees have a positive and significant effect on bank financial performance, , and letters of credit also positively affect bank financial performance, which confirms that these off-balance sheet instruments are valuable tools to enhance profitability and support banking operations. The study reveals that bank size has positive effects on financial performance independently though it does not play a moderating role on the OBS-performance link. Based on the findings, the research recommends that publicly listed commercial banks should; strategically expand their trade finance offerings, focus on tailoring guarantee products to match client needs, strengthen their letters of credit services, particularly for clients engaged in international trade or corporate financing, as LCs improve profitability and support liquidity management. Policy guidance could focus on providing frameworks that enable smaller banks to participate in OBS activities without disproportionate risk exposure.Item Financial planning and analysis and the financial performance of firms listed at the Nairobi securities exchange(KCA University, 2025) Ndinya, Dorine A.The study aimed to analyze the effect of financial planning and analysis on the financial performance of firms listed on the Nairobi Securities Exchange. The specific objectives of the study were to examine the effect of financial modelling and analytics on financial performance of firms listed on the Nairobi Securities Exchange, to determine the effect of budget planning on financial performance of firms listed on the Nairobi Securities Exchange, and to assess the effect of forecasting quality on financial performance of firms listed on the Nairobi Securities Exchange. The dynamic capabilities theory, resource-based view, and information asymmetry theory served as the study's guiding theories. The study concentrated on all 64 companies listed on the NSE and used a descriptive research design methodology. Given the small size of the population under investigation, a census was used for this study. Both primary and secondary data were used. Structured questionnaires were utilized to collect primary data. Using a secondary data collection matrix, secondary data on return on assets were gathered from the annual reports of the 64 companies listed on the NSE over a ten-year period, from 2014 to 2024. A pilot study was conducted to validate and pretest the questionnaire. To evaluate validity and reliability, the researcher relied on the views of research specialists. The data collected were analyzed using both descriptive and inferential statistics. Frequency distributions, standard deviations, means, and percentages were used as descriptive statistics. Regression analysis was conducted to establish the relationship between study variables in inferential statistics. The analyzed quantitative data were presented using tables and graphs. The study was considered significant because it provided actual evidence of how FP&A practices, such as financial reporting, forecasting, budgeting, and performance monitoring, enhanced business profitability, efficiency, and long-term survival. The response rate was 93.4% of the respondents. The findings showed there is a significant positive trend towards financial modelling and analytics, budget planning and forecasting quality had moderate effect on financial performance of firms listed at the Nairobi Securities exchange. The study recommends firms listed at the Nairobi Securities Exchange should adopt an integrated approach to financial planning and analysis by strengthening financial modelling and analytics, enhancing budget planning practices, and improving forecasting quality. Future research should consider expanding the scope beyond firms listed at the Nairobi Securities Exchange to include small and medium-sized enterprises (SMEs) and privately owned companies.Item Effect of internal audit controls on the financial performance of insurance companies in Kenya(KCA University, 2025) Okemwa, Lydiah N.This study examined the effect of internal audit controls on the financial performance of insurance companies in Kenya, focusing on four dimensions: quality assurance programs, internal control systems, communication, and the control environment. A descriptive research design was adopted, targeting all 56 registered insurance and reinsurance firms in the country. Out of these, 45 valid responses were collected through structured questionnaires, representing an 80.4% response rate. Descriptive results indicated consistently high implementation levels of internal audit controls, with mean scores ranging between 4.10 and 4.26. Correlation analysis showed significant positive associations between financial performance and internal control systems (r = 0.670), control environment (r = 0.626), quality assurance (r = 0.478), and communication (r = 0.465). Regression analysis further revealed significant effects for internal control systems (β = 0.482, p < 0.001), control environment (β = 0.357, p = 0.002), and quality assurance programs (β = 0.278, p = 0.016), while communication did not show a statistically significant effect (β = 0.021, p = 0.864). The overall model was statistically significant (F = 22.139, p < 0.001) and explained 68.9% of the variance in financial performance (R² = 0.689). The study concludes that internal audit controls play a critical role in enhancing financial performance and recommends strengthening audit frameworks, enforcing compliance, and fostering ethical governance within Kenya’s insurance sector.Item Chief executive officer characteristics and financial performance of commercial banks in Kenya(KCA University, 2025) Nyantika, Bevaline N.The performance of commercial banks is critical to the stability and growth of Kenya’s financial sector and the broader economy. This study investigates the influence of Chief Executive Officer (CEO) characteristics on the financial performance of commercial banks in Kenya. Specifically, it examines the effects of demographic attributes age, gender, education, and tenure on key financial indicators, including profitability, return on assets (ROA), and net interest margins. Anchored in the Upper Echelons Theory, the study adopts a quantitative research design and utilizes secondary data sourced from the annual reports and regulatory filings of 39 licensed commercial banks over the period 2003 to 2023. Regression analysis was employed to determine the relationship between CEO attributes and bank performance. The results indicate that certain CEO characteristics significantly influence financial outcomes. CEO tenure and gender diversity were positively associated with improved performance, suggesting that longer-serving CEOs and greater female representation at the executive level enhance strategic outcomes. CEO age also demonstrated a positive relationship with performance, reflecting the value of experience and maturity in executive decision-making. In contrast, the impact of educational background was inconclusive, showing no consistent effect across all performance metrics. These findings highlight the strategic role of executive leadership in shaping financial performance in the banking sector. The study offers key insights for policymakers, bank boards, and stakeholders, emphasizing the importance of integrating CEO demographic considerations into leadership selection processes. Recommendations include the adoption of performance-based remuneration systems, fostering leadership continuity, and promoting gender diversity in top executive roles. Overall, the study enhances understanding of leadership dynamics in corporate governance and lays the groundwork for future research on executive influence in financial institutions.Item Strategic innovation and financial performance of commercial banks in Kenya(KCA University, 2025) Momanyi, Edwin O.This study aimed to examine the impact of strategic innovation on the profitability of commercial banks in Kenya. Specifically, it focused on how technological innovation, business model innovation and market expansion influenced financial performance. The research was grounded in the Dynamic Capabilities Theory, Technology Acceptance Model, and Resource-Based View. A descriptive research design was employed, targeting all 42 commercial banks in Kenya, with 126 key participants drawn from the operations, finance, and marketing departments. A census sampling method was used. Data were collected through semi-structured questionnaires (primary data) and annual bank reports from 2019–2024 (secondary data), focusing on metrics such as ROE and ROA. Validity and reliability were ensured through expert consultation and pilot testing. Data analysis involved both descriptive and inferential statistics, and the results were presented using tables and graphs. The response rate was 77.8% of the respondents. The findings showed there is a significant positive trend towards business model innovation, technological innovation, while market expansion had moderate effect on financial performance of commercial banks in Kenya, business model innovation having the highest influence. The study recommends commercial banks in Kenya should intensify efforts to strengthen and scale up the adoption of business model innovations to enhance financial performance. Banks should further leverage data analytics and artificial intelligence to personalize services, improve decision-making, and expand financial inclusion. Future research ought to expand the scope beyond commercial banks to include other types of financial institutions such as microfinance institutions, SACCOs, and investment firms.Item Effect Of Islamic Finance On Performance Of Commercial Banks In Kenya(Kca University, 2020) Akongo, Fredrick O.The main aim of this study was to establish the effect of Islamic finance on the performance of commercial banks in Kenya. The study was guided by three specific objectives which are to; establish the effect of Mudaraba loans on commercial banks’ financial performance in Kenya, assess the effect of Ijara products on commercial banks’ financial performance in Kenya and assess the effect of Murabaha contracts on commercial banks’ financial performance in Kenya. This study used a descriptive research design. The study was undertaken in the two completely established Islamic commercial banks in Kenya as well as the 5 conservative banks offering partial Islamic commercial banking. Secondary data was used for this study. This means that the data used was quantitative in nature. The researcher used financial performance data for the years 2015-2019. Descriptive statistics was utilized to organize Data. To scrutinize the data, descriptive analysis such as standard deviation, frequencies, mean, as well as percentages were utilized. Additionally, Pearson correlation as well as multiple regressions which are inferential statistics were utilized. So as to come up with a reliable model for this survey the researcher carried out appropriate diagnostic tests. The study established that Murabaha is the most common Islamic finance products though the Ijara was also significant. The findings also showed strong positive relationship between Murabaha and bank performance. From the study findings it was evident that there was a positive effect of Ijara on bank performance. Mudaraba had a positive insignificant effect on bank performance. Based on the findings, the study concluded that the Islamic finance affected bank performance with some having a positive significant effect and others insignificant effect. The study recommended that commercial banks in Kenya should sensitize its customers on the need to promote partnership through financing business ideas. Also, among the most recommended measures put in place is by selecting key financial and other indicators to monitor programs based on the statutory requirements on Islamic banking products. Developing systems for managing future performance based on the statutory requirements are also highly recommended.Item Effect Of Ownership Structures On Financial Performance Of Listed Manufacturing Firms In Kenya(KCA University, 2021) Nzau, Stella K.Over the last decade, performance of listed manufacturing firms has been deteriorating with some companies almost collapsing. For instance, Mumias Sugar Company and Eveready have shown dismal financial performance. Prior studies have not addressed the effect of ownership structures on financial performance of manufacturing firms in Kenya. The main objective of the study was to determine the effect of ownership structures on financial performance of listed manufacturing firms in Kenya. Specifically, the study sought: to evaluate the effect of board shareholding on financial performance of listed manufacturing firms in Kenya, to explore the effect of foreign shareholding on financial performance of listed manufacturing firms in Kenya, to investigate the effect of institutional shareholding on financial performance of listed manufacturing firms in Kenya, to determine the effect of individual shareholding on financial performance of listed manufacturing firms in Kenya. This study was pegged on five theories; agency theory, stewardship theory, Stulz’s Integrated Theory, stakeholder’s theory and Resource based theory. This study was undertaken using a descriptive research design. The target population comprised of all seven listed manufacturing firms in Kenya that traded at NSE from 2010 to 2019. The study adopted a census method of data collection. This was made possible by the use of secondary data sheet. Data analysis was undertaken using panel data regression and data analysis results were presented on tables and graphs. The findings revealed that the model linking ownership structures and firm performance was significant. Moreover, the results revealed that foreign shareholding was inconclusive on the effect it has to the financial performance of listed manufacturing firms. Institutional shareholding has negative significant effect on the returns on assets while individual shareholding had a positive and significant effect on firm performance. This study recommended dispersed ownership as it improved financial performance of the manufacturing firms.